A liquidating dividend is:

A) Only declared when a corporation closes down.
B) A return of a portion of the capital contributed back to the stockholders.
C) Not allowed under federal law.
D) Only paid in assets other than cash.
E) Only paid in shares of stock.

Liquidating Dividend

A type of dividend paid by a company to its shareholders out of its capital base, indicating a return of some of the original investment rather than profit.

Capital Contributed

The total value of cash and other assets that shareholders or owners have given to a company in exchange for an ownership interest.

Federal Law

Legislation enacted by the national government of a country, applicable across the entire country.